Alvin Camba researched two Chinese/BRI projects in the Philippines: the Kaliwa Dam and the Chico River Pump Irrigation Project. He found that Philippine President Duterte chose to work with Chinese partners because it would help his own domestic political position.
Japanese lenders provide the largest amount of foreign aid to the Philippines. Despite Chinese lenders’ interest rates being higher than Japanese lenders’, Duterte chose to work with Chinese partners because they would be able to finish the projects quicker and within Duterte’s term. Japanese lenders demand stricter environmental and social standards, which delays the process. Duterte needed the projects to complete within his term in order to use them as clout for the 2022 elections. Moreover, Chinese negotiators gave in to several key Filipino demands, which made them more useful to Duterte since he was planning to use the projects to reward local elites. The higher Chinese interest rates are not a large problem for Duterte since the repayment burden will mostly fall on his successors.
Camba argues that these cases provide an important lesson to the US-led Build Back Better World (B3W) Initiative: “leaders have political objectives in addition to development or geopolitical ones, influencing their calculus to work with Chinese partners”. The Philippine cases show that B3W aims such as transparency, climate-friendly projects and good governance may not influence a leader’s motivation to choose Chinese investors, especially when a leader uses investment/aid for political or personal gain. Camba suggests that G7 soft power may instead be used more successfully on projects that deal with poverty, climate change and effects of the pandemic, which also address the hardships that are at the root of populist autocrats’ popularity.
Vera Kranenburg
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